Spokane Office Market Report — Q2 2026
Spokane’s office vacancy rate was 7.2% in Q2 2026, essentially flat year over year and less than half the U.S. national office average of roughly 17%. The market’s average asking rent was $21.39 per square foot (gross), up 1.2% year over year, while the market cap rate stood at approximately 10.2%. Trailing 12-month office sales volume totaled $85.9 million — below the five-year average of about $101 million — though the second quarter alone contributed roughly $43 million, led by a single medical-office portfolio. With only 57,000 square feet of office space under construction across the metro, Spokane remains a supply-constrained, income-oriented market.
Spokane Office Key Statistics — Q2 2026
| Metric | Q2 2026 | Detail |
|---|---|---|
| Office vacancy rate | 7.2% | Flat YoY (7.3%); roughly half the U.S. average (~17%) |
| Average asking rent | $21.39/sf gross | +1.2% year over year |
| Market cap rate | 10.2% | Investor pricing benchmark for Spokane office |
| Under construction | ~57,000 sf | A single, pre-leased building in the Valley |
| Total inventory | ~24.2M sf | Metro-wide office stock |
| Tightest submarket | South Hill — 3.1% | Also led the metro in sales volume |
| Trailing 12-mo sales volume | $85.9M | Across 53 transactions |
Spokane Office Market Overview — Q2 2026
Spokane’s office market entered mid-2026 in balance rather than distress. The metro vacancy rate held at 7.2%, barely moved from 7.3% a year earlier and sitting close to its five-year average of 7.6%. That figure is less than half the U.S. national office vacancy rate, which has hovered near 17% as many larger metros continue to absorb pandemic-era oversupply.
The reason Spokane looks so different is supply discipline, not a demand boom. Only about 57,000 square feet of office space is under construction across the entire metro — a single, fully pre-leased building in the Valley — and total inventory of roughly 24.2 million square feet has grown only about 0.3% in five years. With no wave of new space opening to poach tenants, existing owners have held their ground. Asking rent has climbed steadily rather than spectacularly, reaching $21.39 per square foot gross, a 1.2% year-over-year gain.
Spokane Office Vacancy, Rents & Absorption — Q2 2026
By building quality, the market’s limited trophy segment (4 & 5 Star) carries the highest vacancy at 13.4%, while commodity 1 & 2 Star space is tightest at 5.3% — the reverse of the national flight-to-quality pattern, because Spokane’s affordable, functional space stays leased. Trailing 12-month net absorption was slightly negative at about −15,300 square feet, reflecting uneven demand that was nonetheless absorbed without a spike in empty space.
Performance varies by submarket. South Hill is the tightest at 3.1% vacancy and led the metro in sales volume, while the Valley posted the strongest absorption. The Spokane CBD remains the soft spot, with vacancy near 11.1% and the lowest pricing in the market — the place where softer traditional-office demand concentrates while suburban and medical product does the trading.
Office Property Sales in Spokane — Recent Transactions
The defining transaction of the quarter was a medical-office portfolio: the Spokane Eye Clinic assets, roughly $28.7 million across four buildings, acquired by an institutional medical real estate investor in May 2026. Owner-users were also active — Washington State University bought its own University District innovation building for about $8.3 million ($211/SF), and in 2025 a local school district acquired the Riverpoint One administrative campus for $12.2 million, less than the cost to build new.
Private investors, meanwhile, are chasing yield. A 1993-vintage medical building in West Plains traded early in 2026 for $6.1 million (about $159/SF) at an 11.4% cap rate, fully leased on a triple-net structure, while a premium 7,200-square-foot investment property in the Valley changed hands at roughly $775 per square foot. That spread — $159 to $775 per square foot in the same market — is the story for anyone underwriting Spokane office.
With Spokane office cap rates near 10.2% and the tightest submarket — South Hill — at just 3.1% vacancy, well-leased buildings are pricing at a premium. Want to know what your Spokane office building is worth in today’s market?
Office Cap Rates & Investment Activity — Inland Northwest
Trailing 12-month sales volume of $85.9 million across 53 transactions sits below the roughly $101 million five-year average, yet the second quarter alone produced about $43 million — concentrated in that single medical portfolio. This is a thin, lumpy market where a handful of deals move the entire figure. The blended market cap rate is about 10.2%, with individual transactions clearing anywhere from 6.4% for newer, well-located product to 11.4% for older single-tenant assets.
The buyer pool has split into three playbooks: institutions targeting core medical for its sticky tenancy, owner-users buying below replacement cost, and private investors chasing double-digit yields on clean, net-leased assets. Roughly 74% of volume came from private buyers and about 90% of buying was local — this is a market bought by people who know it, and Spokane’s historically higher cap rates give those buyers room to make deals pencil against today’s financing costs.
Inland Northwest Office Market Forecast — 2026
The outlook points to continued equilibrium. CoStar forecasts Spokane office vacancy holding near 7.2% through the end of 2026, with rent growth easing slightly to about 1.1% — just under the ~1.3% U.S. forecast. There is no sign of a sharp correction or a rapid recovery; fundamentals are expected to track close to current levels as supply and demand stay in balance.
The question worth watching is the flip side of Spokane’s greatest strength. With only one building under construction and inventory essentially flat for a decade, a sudden requirement for a large block of modern contiguous space would be difficult to fill. Today’s stability may be quietly setting up tomorrow’s supply constraint — something for long-term owners and prospective developers to keep in view.
What Q2 2026 Means If You Own Spokane Office Property
If you own Spokane office property, three numbers drive your decisions this quarter. At a 10.2% cap rate, every $10,000 of net operating income is worth roughly $98,000 in value — so the in-place income you’ve built is exactly what a buyer prices. With overall vacancy at 7.2% and commodity (1–2 Star) space tightest at 5.3%, well-occupied functional buildings are in their strongest position in years. And South Hill at 3.1% vacancy is a reminder that value here is highly location-specific.
- Thinking about selling? Start with a broker opinion of value to see where your building prices today, then our seller representation team runs the process.
- Holding for income? Strong occupancy is a good moment to review property management and lease structure.
- Have space to fill? See how our leasing team positions Spokane office space.
- Compare your asset class: retail, industrial, and multifamily.
Spokane Office Market — Frequently Asked Questions
What is the Spokane office vacancy rate in Q2 2026?
Spokane’s office vacancy rate was 7.2% in Q2 2026, essentially unchanged from 7.3% a year earlier and less than half the U.S. national office average. It sits close to Spokane’s five-year average of 7.6%. (Source: CoStar)
Are Spokane office rents rising or falling?
Rising modestly. The market asking rent was $21.39 per square foot gross in Q2 2026, up 1.2% year over year — below the ~1.5% national pace and well under the ~$37/SF national benchmark. Rent growth is forecast near 1.1% for full-year 2026.
What are office cap rates in Spokane?
The Spokane office market cap rate was about 10.2% in Q2 2026, with individual transactions ranging from 6.4% for newer, well-located assets to 11.4% for older single-tenant product. These yields run well above coastal markets.
How much office space sold in Spokane over the past year?
Trailing 12-month office sales volume was $85.9 million across 53 transactions, below the ~$101 million five-year average. Q2 2026 alone accounted for roughly $43 million, led by the Spokane Eye Clinic medical-office portfolio (~$28.7 million).
Is now a good time to buy or sell office property in Spokane?
It depends on the asset. Pricing for older buildings has reset and double-digit cap rates are available, while newer and medical product trades tighter. With little new supply and stable demand, owners of quality, leased assets have held value. A broker opinion of value is the best starting point.
What is the 2026 forecast for the Spokane office market?
CoStar forecasts vacancy holding near 7.2% through year-end 2026 with rent growth around 1.1%. The outlook is continued stability rather than a sharp recovery or correction.
Spokane Office Real Estate Broker — Eric Peterson, ACTIV8 Real Estate, LLC
Eric Peterson is President and Designated Broker of ACTIV8 Real Estate, LLC, based in Liberty Lake, Washington. He advises owners, investors, and tenants on commercial real estate across Spokane and Coeur d’Alene / North Idaho, and authors ACTIV8’s quarterly and annual market reports. Contact Eric at 509-255-3476 or [email protected] for a broker opinion of value or a custom market analysis.
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Whether you own, invest, or lease office space in Spokane or Coeur d’Alene, ACTIV8 will map these trends to your specific assets and NOI.
Eric Peterson | 509-255-3476 | [email protected] | ACTIV8RE.com
